Impact of 1% calculator: what one point of return costs

What the impact of 1% calculator answers

One percentage point sounds small. An expense ratio of 1.7% instead of 0.7%, or a fund that returns 11% while its category returns 12%, feels like a rounding difference. The impact of 1% calculator runs one plan at three returns, your assumption, one point below and one point above, and shows the difference in rupees.

Its sibling, the direct vs regular calculator, prices one particular gap: a scheme's two disclosed expense ratios. This page is the general version, for any one-point difference you want to weigh.

The four inputs

The step-up raises the monthly amount once a year, as a step-up SIP does. If your assumed return is below 1%, the lower column is held at 0% rather than going negative.

The results

Three cards:

• At your assumed return: the corpus, with the total invested underneath.
• One point less, with the rate in brackets: the rupees lost, and that loss as a share of the corpus.
• One point more: the rupees gained, and its share.

A chart, The same money, three returns, draws all three paths. A summary box lists the total invested, labelled "the same in all three", and the corpus at each rate. That label is the point of the page: the money put in never changes, so every rupee of difference comes from the return.

A worked example with the defaults

₹20,000 a month for 25 years at 12%, no step-up. ₹60 lakh goes in.

One point less costs more than the entire ₹60 lakh invested. And the gain from one point more is larger than the loss from one point less, because the extra return compounds on an already larger balance.

How the horizon changes the answer

Keep ₹20,000 a month at 12% and move the years slider:

Over five years one point barely matters. Over thirty-five it takes almost a quarter of the corpus. The cost of a percentage point grows with the horizon faster than the horizon itself, which is why fees matter most for the goals furthest away. The magic of compounding explains the same curve from the other side.

Two settings that change the share

A step-up. Set the annual step-up to 10% with the other defaults. The plan now invests ₹2.36 crore and reaches ₹8.55 crore. One point less costs ₹1.07 crore, but that is 12.6% of the corpus rather than 16.2%. With a step-up, more of the money arrives in later years and has less time to compound, so the same one point bites a smaller share.

A lower base rate. At 8% instead of 12%, one point less costs ₹28.51 lakh, 14.9% of a ₹1.91 crore corpus. The share is still large, because what matters is the horizon more than the starting rate.

Where the point usually comes from

The calculator does not care where the gap comes from, but you should:

• Fees. A Regular plan's commission is often around one point a year in equity funds. How 1.2% a year costs lakhs prices the typical gap, and the most expensive equity funds shows that 21 of 540 direct plans charged 2% or more at the end of September 2026.
• A fund that trails its peers. Funds in one category can finish more than a point apart over five years; large-cap funds vs the Nifty 50 lines up 27 of them against the index.
• Allocation. A more conservative mix than the goal needed gives up return for lower swings. That can be the right trade, but it has this price.
• Time. Starting late is a different lever with a similar effect. The cost of delay calculator and what a five-year delay costs put it in rupees.

What a fund really costs lists everything inside an expense ratio and the costs that sit outside it.

What the calculator assumes

1. Constant returns. All three columns earn one fixed rate every month (the annual rate divided by 12), with each instalment at the start of its month. Real returns are uneven.
2. Nominal rupees, before tax. The corpus is not adjusted for inflation.
3. A higher return is not free. The page says so too: one more point of assumed return usually means more equity and deeper falls along the way. The arithmetic shows what the point is worth if it arrives, not the odds of earning it.

Use the impact of 1% calculator to put a rupee figure on a choice that looks small as a percentage: a cheaper plan, a fee you could avoid, or a fund that has lagged its peers. None of this is a recommendation of any fund.